Monday, November 17, 2008

Economic Update: Bad News Gets Worse as Citibank Lays Off Thousands

AltTulsa doesn't do economics. We freely confess ignorance on most topics related to major economic issues.

But even economic dolts like us can recognize a big layoff story, and the Citibank has one. Here, courtesy of the AP, is the very bad news:
Citigroup Inc. is shedding approximately 53,000 more employees in the coming quarters as the banking giant struggles to steady itself after suffering massive losses from deteriorating debt.
Let's get this straight: 53,000 layoffs, as in 3,000 more than 50,000? And this on top of some 20,000 earlier layoffs?

Holy Cow!

This is a huge number by any standard, and surely a sign of a serious problem at Citibank, which is a major financial institution. When the banks are in trouble, it certainly doesn't sound like a good sign for the rest of us.

UPDATE: On the other hand, maybe the New York AG has a point:
ALBANY, N.Y. (AP) -- New York Attorney General Andrew Cuomo says Citigroup executives should forgo their bonuses this year after the company announced massive layoffs.

Calling the layoffs of 53,000 people "disturbing," Cuomo says top executives shouldn't get bonuses while investors, taxpayers and employees suffer.

2 comments:

Tulsan said...

Parting gifts from Bush and the GOP. Will we make it to Inauguration Day? It's iffy.

Nouriel Roubini: Obama will inherit the most severe recession, the worst financial & banking crisis and a ballooning fiscal deficit

"However, Obama will inherit and economic and financial mess worse than anything the U.S. has faced in decades: the most severe recession in 50 years; the worst financial and banking crisis since the Great Depression; a ballooning fiscal deficit that may be as high as a trillion dollar in 2009 and 2010; a huge current account deficit; a financial system that is in a severe crisis and where deleveraging is still occurring at a very rapid pace, thus causing a worsening of the credit crunch; a household sector where millions of households are insolvent, into negative equity territory and on the verge of losing their homes; a serious risk of deflation as the slack in goods, labor and commodity markets becomes deeper; the risk that we will end in a deflationary liquidity trap as the Fed is fast approaching the zero-bound constraint for the Fed Funds rate; the risk of a severe debt deflation as the real value of nominal liabilities will rise given price deflation while the value of financial assets is still plunging. This is the bitter gift that the Bush administration has bequeathed to Obama and the Democrats."

Anonymous said...

yeah, right - it's all the Repubs fault.

Of course, if we're in a hole solely caused by Republican digging (and haven't the Dem's had Congressional majorities since 2006?, and haven't the Dems been pushing easy money for 10 years hard for low income house wanna-be-buyers that precipitated most of the financial mess?) then is the Democrat's 2009 strategy to "dig down 4 times as fast as the Repubs did" really the correct strategy? Feel free to ignore questions like this if they interfere too much with your nice neat 'it's all their fault' painting.